Chapter 7 Bankruptcy Video #2

Please note: This presentation provides general information about the bankruptcy process. Since the law is continually changing, some information in this program may be out of date, so it should not be relied upon as legal authority. It should not be used as a substitute for reference to the United States Bankruptcy Code and the Federal Rules of Bankruptcy Procedure, or to local rules of practice adopted by each bankruptcy court. This presentation should not substitute for the advice of competent legal counsel. It is always best to consult an attorney about your legal rights and responsibilities in your particular case.

Filing Chapter 7 Bankruptcy

Hello, I am licensed bankruptcy counselor Damian Falcone. In the episode of our bankruptcy series I will be talking about filing a chapter 7 bankruptcy and discussing what kind or relief it can offer you.

This is Get Settled - your source for consumer debt settlement information. As always, for even more information, go to www.falconcreditmanagement.com.

As we discussed in our last video, the purpose of the bankruptcy laws is to give individuals a fresh start when they are burdened by excessive debt. Perhaps the quickest way to accomplish this is through a chapter 7 bankruptcy. In a chapter 7 bankruptcy, an individual can obtain a discharge from most debts while retaining some exempt assets such as a home, household goods, and an automobile - keep in mind that you still have to keep paying on your home and car if you want to keep them. Other non-exempt assets are collected and then sold. The proceeds are then used to pay your creditors. When the bankruptcy is complete, your debts, with a few exceptions, are wiped out. Debts such as credit cards and medical bills will be gone in a matter of months.

There are some debts that cannot be discharged through a chapter 7 bankruptcy. These include taxes that you owe, debts incurred through fraud, some debts incurred within 60 days of the filing of the bankruptcy, child support, alimony payments, and student loans. The issue of dischargeability can be a complex one, and there are other variables and limitations beyond these few exceptions that should be discussed with your lawyer.

A chapter 7 bankruptcy is typically reserved for those individuals with no regular source of income. In fact, recent amendments to the bankruptcy code require the application of a “means test” to determine whether individual debtors qualify for relief under chapter 7. If a debtor’s income is in excess of certain thresholds, the debtor may not be eligible for chapter 7 relief. If that is the case, then the debtor may consider filing a chapter 13 bankruptcy. That will be discussed in our next video.